Learning Objective
Show
Let’s pause for a minute and reflect on the management functions that we’ve discussed so far—planning, organizing, and directing. As founder of Notes-4-You, you began by establishing plans for your new company. You defined its mission and set objectives, or performance targets, which you needed to meet in order to achieve your mission. Then, you organized your company by allocating the people and resources required to carry out your plans. Finally, you provided focus and direction to your employees and motivated them to achieve organizational objectives. Is your job finished? Can you take a well-earned vacation? Unfortunately, the answer is no: your work has just begun. Now that things are rolling along, you need to monitor your operations to see whether everything is going according to plan. If it’s not, you’ll need to take corrective action. This process of comparing actual to planned performance and taking necessary corrective action is called controllingManagement process of comparing actual to planned performance and taking corrective actions when necessary.. A Five-Step Control ProcessYou can think of the control function as the five-step process outlined in Figure 6.10 "Five-Step Control Process". Figure 6.10 Five-Step Control Process  Let’s see how this process might work at Notes-4-You. Let’s assume that, after evaluating class enrollments, you estimate that you can sell one hundred notes packages per month to students taking the sophomore-level geology course popularly known as “Rocks for Jocks.” So you set your standard at a hundred units. At the end of the month, however, you look over your records and find that you sold only eighty. Comparing your actual performance with your planned performance, you realize that you came up twenty packages short. In talking with your salespeople, you learn why: it turns out that the copy machine broke down so often that packages frequently weren’t ready on time. You immediately take corrective action by increasing maintenance on the copy machine. Now, let’s try a slightly different scenario. Let’s say that you still have the same standard (one hundred packages) and that actual sales are still eighty packages. In investigating the reason for the shortfall, you find that you overestimated the number of students taking “Rocks for Jocks.” Calculating a more accurate number of students, you see that your original standard—estimated sales—was too high by twenty packages. In this case, you should adjust your standards to reflect expected sales of eighty packages. In both situations, your control process has been helpful. In the first instance, you were alerted to a problem that cut into your sales. Correcting this problem would undoubtedly increase sales and, therefore, profits. In the second case, you encountered a defect in your planning and learned a good managerial lesson: plan more carefully. Key TakeawayThe process of comparing actual to planned performance and taking corrective action is called controlling. The control function can be viewed as a five-step process: (1) establish standards, (2) measure performance, (3) compare actual performance with standards and identify any deviations, (4) determine the reason for deviations, and (5) take corrective action if needed. Exercise(AACSB) Analysis Have you ever gone to an ice cream stand and noticed that the “double dipper” ice cream cone the customer beside you bought has a lot more ice cream than does your “double dipper?” If you were the supervisor of the ice cream stand, how would you ensure that all cones received the same amount of ice cream? What if, instead of being the supervisor of the ice cream stand, you are the manager of a professional baseball team? How would you apply the five-step control process to your job as manager? The comparing step determines the degree of variation between actual performance and standard. If the first two phases have been done well, the third phase of the controlling process – comparing performance with standards – should be straightforward. Comparing Actual Performance with Standards This step involves a comparison of actual performance with the standard. Such a comparison will reveal the deviation between actual and desired results. The comparison becomes easier when standards are set in quantitative terms. For instance, the performance of a worker in terms of units produced in a week can be easily measured against the standard output for the week. Comparing Performance against Standards
Examples of Qualitative Standards: (a) Improving the motivation level of employees. (b) Improving labor relations. (c) Improving the quality of products. (d) Improving goodwill etc. Thus, standards proceed as a lighthouse that warns and guides the ships at sea. Standards are the benchmarks towards which efforts of the whole organization are directed. The procedure of controlling follows a sequence of reasonable steps as follows –
This is the first step of the control procedure. Before we start any other work, the managers need to set the standards against which the actual performances will be measured. These performance standards can be in the form of goals, such as revenue from sales over a period of time. Before these standards are set an appropriate study of the economy, situation and probability must be done so that the standards set are practical in nature. The standards should be attainable, measurable, and clear.
The next consistent step in the control procedure is to measure the actual performance of the employees of the organization. The actual performance of the employee is measured against the target. However, this dimension of performances is not as straightforward as it sounds, particularly for non-technical jobs. When a manager is concerned with controlling sales, daily, weekly or monthly sales figures represent actual performance. With the increasing levels of management, the measurement of performance becomes difficult.
This comparison of the actual performances with the standards will make known the differences and deviations. This compares the degree of difference between the actual performance and the standard. In real case scenarios, these numbers almost never match up completely. It is completely necessary to evaluate deviations to determine why the standard is not being met when performance falls short of the standard. But managers need to ensure that these deviations are not beyond the acceptable ranges.
It is initiated by the manager who corrects any defects in actual performance. This brings us to the final step of the control process. If the deviations in the third step are in an unacceptable range, then the firm needs to improve their performances. And the management must take action to get better the actual performance of the firm in those problem areas. After the reasons for deviations have been indomitable, managers can then build up solutions for issues with meeting the standards and make changes to processes or behaviors. Which actual performance can be compared is a?Answer. Answer: Comparing actual performance with standards or goals: Accept or reject the product or outcome. Analyzing deviations: Managers must determine why standards were not met.
What is the comparison of actual and desired performance?The process of comparing actual to planned performance and taking corrective action is called controlling.
What is the difference between actual performance in standard called as?Deviations are a difference between actual performance and standard performance.
Why is actual performance compared with standard in the process of controlling?Actual performance is compared with standards in the process of controlling to take corrective actions if significant deviation occurs.
|
What is an expected level of performance against which actual performance can be compared?
zusammenhängende Posts
Urheberrechte © © 2024 ketiadaan Inc.
